Cancelling a Mudhaarabah partnership agreement
Question:-
Is it permissible for the partners of a Mudhaarabah partnership agreement to cancel the partnership?
Answer:-
Yes, it is permissible for both partners to inform each other and cancel the partnership. In this case, the Mudhaarib should return the capital to the Rabb-ul-Maal. The capital should be converted to cash at the time of cancellation and should not be in the form of goods. If the partnership accrued any profits then such profits should be shared according to the stipulated percentages agreed upon in the partnership. On the contrary, if the partnership didn’t accrue any profits then the Mudhaarib will not receive any profits.
References:- Badaa’i-us Sanai’ee Pg.108/109 Vol.6 Saeed. Islami Fiqh Pg.397 Vol.2
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